The markets presented plenty of head fakes this quarter. In January, contrary to everyone's expectations, the gains of last year kept right on coming through most of the first quarter, only to hit a brick wall in March thanks to troubles in the Middle East followed by nature's one-two punch to Japan. Despite that, the indexes finished the first quarter with the best gains in over two decades.

The Dow racked up 742 points (6.4 percent), the S&P 500 Index gained 68 points (5.4 percent) while the NASDAQ closed up 128 points for a 4.8 percent gain. If we annualize those gains we could be looking at a 20 percent plus gain for the year, which puts my forecast of a 20-23 percent gain in

The above headline may be a bold statement, especially when the averages are already at levels that surpass this year's stock-market highs. But the actions and words of the Federal Reserve Bank this week convinces me that stocks have substantial upside ahead of them.

As I predicted, this week was a big one for investors and the country. The mid-term election results and the resulting legislative gridlock in Washington most pundits expect leaves the Fed as our only hope in reviving the economy and reducing unemployment. (see yesterday's column "Don't Fight the Fed.")

Now that QE II is in the bag, expect QE III, QE IV and maybe even a QE V, if that's what it takes to restore economic growth and reduce the unemployment rate to under 7 percent in this country. After the mid-term election results, I believe the Federal Reserve is all that stands between us and a stagnant, deflationary economy. I would not bet against them in this endeavor.

Most of Wall Street is expecting fiscal gridlock in Washington now that the GOP has re-taken the House but is still the minority in the Senate. That will mean little if any new initiatives to either grow the economy or drive down unemployment have much chance of passing. One exception may be a compromise on the Bush

No, QE II is not the name of a cruise ship; although it might as well be, given the upward ride it is providing the stock market. The Federal Reserve is expected to launch another quantitative stimulus effort in early November and the markets are rising in anticipation of that event.

On Friday, Fed Chairman Ben Bernanke reiterated that the central bank is ready to move if necessary to stimulate the economy. Investors are assuming it's a question of "when" and not "if" the Fed will move to buy additional U.S. Treasury bonds, mortgage-backed securities and whatever else they decide will provide additional impetus to a slow-growth economy.

Bill Schmick is registered as an investment advisor representative and portfolio manager with Berkshire Money Management (BMM), managing over $200 million for investors in the Berkshires. Bill’s forecasts and opinions are purely his own and do not necessarily represent the views of BMM. None of his commentary is or should be considered investment advice. Anyone seeking individualized investment advice should contact a qualified investment adviser. None of the information presented in this article is intended to be and should not be construed as an endorsement of BMM or a solicitation to become a client of BMM. The reader should not assume that any strategies, or specific investments discussed are employed, bought, sold or held by BMM. Direct your inquiries to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com Visit www.afewdollarsmore.com for more of Bill’s insights.